Research › Search › Judgment

Madhya Pradesh High Court · body

2011 DIGILAW 496 (MP)

Kadambini W/o Atul Trivedi v. State of M. P.

2011-04-26

S.C.SHARMA

body2011
ORDER S.C. Sharma, J. 1. Mr. Shailendra Mukati, learned Counsel for the Petitioner. Mrs. Jyoti Tiwari, learned Dy. GA for the Respondent No. 1. Mr. S.M. Panadiwal, learned Counsel for the Respondents No. 2, 3 and 4. Mrs. Niranjana Chourasiya, learned Counsel for the Respondent No. 5. Petitioner before this Court has filed this present petition being aggrieved by the demand notice dated 15-1-2010, by which the Additional Tehsildar has initiated proceedings under the Madhya Pradesh Lok Dhan (Shodhya Rashiyon ki Vasuli) Adhiniyam, 1988. Petitioner is also aggrieved by order dated 31-3-2010 issued by Deputy Director of Khadi tatha Khadi Udyog, Bhopal, by which he has refused to grant subsidy to the Petitioner in respect of margin money (30%). 2. Petitioner's contention is that a scheme was floated by Government of India for establishing industries in rural areas known as Consortium Bank Credit Scheme and under the scheme 65% of the principal amount was required to be sanctioned by the Bank, 30% percent of the amount was to be sanctioned by Madhya Pradesh Khadi Gram Udyog Board as a margin money and 5% of the amount was required to be paid by the borrower himself. Petitioner has further stated that project was sanctioned by the State Level Project Appraisal Committee in its meeting dated 27-3-1999 and Petitioner was granted total loan of Rs. 9.80 lacs and the margin money i.e. 30% of the amount was Rs. 2.94 lacs. Petitioner has further stated that as per the terms and conditions of the sanction order as well as the scheme, after availing the loan she has applied for grant of subsidy and the same was well within the knowledge of the Respondents. Petitioner further stated that in spite of the fact that she has paid the entire loan amount by adhering to the time schedule, the Respondent No. 2 has not granted subsidy to the Petitioner to the tune of Rs. 2.94 lacs as sanctioned by sanctioned order dated 29-5-1999 and on the contrary without releasing the margin money, R.R.C dated 15-1-2010 has been issued which is impugned in the present writ petition. Petitioner is also aggrieved by the order passed by the Respondent No. 2 rejecting the case of the Petitioner for grant of subsidy, dated 31-3-2010 (Annexure-P-14). 2.94 lacs as sanctioned by sanctioned order dated 29-5-1999 and on the contrary without releasing the margin money, R.R.C dated 15-1-2010 has been issued which is impugned in the present writ petition. Petitioner is also aggrieved by the order passed by the Respondent No. 2 rejecting the case of the Petitioner for grant of subsidy, dated 31-3-2010 (Annexure-P-14). Learned Counsel for the Petitioner placed reliance upon the judgment delivered by a Division Bench of this Court in the case of Sri Bajrang Extraction Pvt. Ltd. and Anr. v. The Secretary to the Government of M.P. and Ors. reported in AIR 1993 M.P. 202 and his contention is that keeping in view the aforesaid judgment as an Industry was established in a backward area (rural area) and the unit has fulfilled all the conditions of the scheme, the claim of the unit could not have been rejected on the ground that it was not processed before expiry of time limit. 3. Reply has been filed on behalf of the Respondents No. 3 and 4 and the stand of the Madhya Pradesh Khadi and Gram Udyog Board is that the present writ petition is not maintainable as action has been initiated under the provisions of Madhya Pradesh Lok Dhan (Shodhya Rashiyon ki Vasuli) Adhiniyam, 1988 and the provisions of Madhya Pradesh Land Revenue Code. The Madhya Pradesh Khadi and Gram Udyog Board has not filed any reply on merits. 4. Detailed and exhaustive reply has been filed on behalf of Respondent No. 5 and the stand of the Khadi and Village Commission is that they have sanctioned the margin money in respect of all projects under the Madhya Pradesh Khadi and Gram Udyog Board and the Madhya Pradesh Khadi and Gram Udyog Board has not released the margin money of Rs. 2.94 lacs to the Petitioner and un-spent balance margin money of Rs. 84,527,39/- was returned by the State Khadi and Village Industries Board to Khadi and Village Industries Commission. Respondent No. 5 has categorically stated that they are certainly not at all fault in the matter as they have already released the money to the State Level Board and the KVIC has got no role to release the margin money to the Petitioner as the same was released by them. 5. Learned Counsel arguing on behalf of Respondent Nos. Respondent No. 5 has categorically stated that they are certainly not at all fault in the matter as they have already released the money to the State Level Board and the KVIC has got no role to release the margin money to the Petitioner as the same was released by them. 5. Learned Counsel arguing on behalf of Respondent Nos. 3 to 5 has placed reliance upon the judgment passed by this Court in the case of Smt. Sadhna Chourasia v. Punjab National Bank and Ors. 2010 (4) MPLI 708 : 2010 (5) MPHT 288 (D.B.) and his contention is that the RRC issued by the Tehsildar cannot be Questioned in civil proceedings as held by a Division Bench of this Court. 6. Heard learned Counsel for the parties and perused the record. The matter is being disposed of at motion hearing stage itself with the consent of the parties. 7. In the present case, the Petitioner who is an educated lady, in order to start a business in rural area, submitted an application under the Consortium Bank Credit Scheme before Respondent Madhya Pradesh Khadi and Gram Udyog Board and the Madhya Pradesh Khadi and Gram Udyog Board vide its meeting dated 27-3-1999 has sanctioned the project in favour of the Petitioner for establishing an industry. Total amount of Rs. 9.80 lacs was sanctioned by the Respondents. This Court has carefully gone through the scheme as well as the indemnity bond and from a bare perusal of the terms and conditions of the indemnity unity bond executed by the Petitioner, it is evident that the entire loan amount was required to be repaid within a period of seven years. Scheme further provided that for the first year period only interest was required to be paid in four in settlements. Scheme further reveals that the remaining amount was required to be repaid in remaining six years period along with interest. As per scheme 65% of the amount was the loan amount and 30% of the amount which was extended by way of financial assistance by Respondents i.e. margin money was to be adjusted as subsidy after repayment of the entire loan amount. Five per cent amount was required to be paid by the borrower. As per scheme 65% of the amount was the loan amount and 30% of the amount which was extended by way of financial assistance by Respondents i.e. margin money was to be adjusted as subsidy after repayment of the entire loan amount. Five per cent amount was required to be paid by the borrower. The Petitioner as he has repaid the entire amount within a period of seven years was entitled for adjustment 30% of the amount of margin money which was availed by him by way of financial assistance by Respondents as subsidy amount. Respondents instead of adjusting the aforesaid amount as subsidy amount have taken action against the Petitioner under the provisions of Madhya Pradesh Lok Dhan (Shodhya Rashiyon ki Vasuli) Adhiniyam, 1988. It is really unfortunate that the Respondents No. 3 and 4 have not preferred to file any reply commenting upon the scheme nor have denied the averments made In the Writ Petition. Detailed and exhaustive reply has certainly been filed by the Respondent No. 5 Khadi and Gramodhoyaga, (Govt, of India), Mumbai. Paragraphs 6 and 7 of the aforesaid reply reads as under: 6. That in the reply of para 6(c) it is submitted that Managing Director M.P. Khadi and Village Industry Board vide its letter dated 8-2-2010 has made an appeal to Chief Executive Officer of KVIC the Respondent No. 5 informing that Smt. Kadambini, Devi Trivedi the Petitioner beneficiary under CBC Loan frequently demanding for release, of margin money since State Board Madhya Pradesh does not have funds under this head, KVIC the Respondent No. 5 may provide margin money of Rs. 2.94 lacs to enable State Board to release the amount to said beneficiary. In a reply to said letter the Respondent No. 5, (KVIC) had informed that CBC Scheme had been discontinued hence request for release of margin money could not be considered at this juncture. Since KVIC the Respondent No. 5 is not directly involved in releasing the loan to Petitioner therefore, no relief could be claimed against them. In a reply to said letter the Respondent No. 5, (KVIC) had informed that CBC Scheme had been discontinued hence request for release of margin money could not be considered at this juncture. Since KVIC the Respondent No. 5 is not directly involved in releasing the loan to Petitioner therefore, no relief could be claimed against them. The Respondent No. 5 had already intimated to the State Board the status of CBC funds and since the release of loan/margin money under CBC scheme was discontinued since 31st March, 2005 therefore, the Petitioner could not have compelled the Respondent No. 5 to accept the proposal from the State Board who were directly involved with the disbursement of loans to their account holders/beneficiaries. 7. That in reply to pram 6(d) it is submitted that as per record of Accounts Department of Respondent No. 5, there was demand from State Khadi and Village Industries Board MP for release of Rs. 2,602.79 lacs as CBC loan and Rs. 1,026.68 lacs as margin money. As the said demand of State Khadi and Village Industries Board MP was considered by KVIC the Respondent No. 5 and accordingly funds were released up to 22-10-1999. The claim of the Petitioner for the margin money pertain to the year 1999 which can be seen from the copy of the order dated 27-3-1999 issued by the State Khadi and Village Industries Board M. P. (Annexure-A) by said letter the name of Smt. Kadambini Trivedi was sanctioned for margin money to the tune of Rs. 2.94 lacs but the same was not released, the reason for not releasing margin money is best known to State Khadi and Village Industries Board, MP. At the same time unspent balance of margin money amount Rs. 84,527,39/- was returned by State Khadi and Village Industries Board MP to Khadi and Village Industries Commission (Respondent No. 5) in the month of January, 2001 ignoring the pending cases like (Petitioner) Smt Kadambini Trivedi (Statement showing refund of margin money by State Khadi and Village Industries Board M.P. is pleaded as (Annexure-B). 8. 84,527,39/- was returned by State Khadi and Village Industries Board MP to Khadi and Village Industries Commission (Respondent No. 5) in the month of January, 2001 ignoring the pending cases like (Petitioner) Smt Kadambini Trivedi (Statement showing refund of margin money by State Khadi and Village Industries Board M.P. is pleaded as (Annexure-B). 8. The aforesaid reply makes it very clear that the Khadi and Gram Udyog Commission (apex body) has already sanctioned the margin money and has transmitted the same to Madhya Pradesh Khadi and Gram Udyog Board, Bhopal including the amount of the Petitioner i.e. 2.94 lacs and the Madhya Pradesh Khadi and Gram Udyog Board instead of adjusting the amount of margin money by adjusting it as subsidy amount has returned a sum of Rs. 84,527,39/- back to Khadi and Village Industries Commission in the month of January, 2001. Thus, it is evident that lapse if any is on the part of Respondents No. 3 to 5 in the matter of adjustment of the margin money. No reply has been assigned by Respondent Nos. 3 and 5 for not adjusting the aforesaid amount except for issuing a letter to the Petitioner, which is enclosed as Annexure-P-14, wherein it has been informed that the scheme has come to an end. 9. Division Bench of this Court in the case of Shri Bajrang Extraction Pvt. Ltd. and Anr. (supra) in almost similar circumstances in Paragraph-16 and 17 held as under: 16. Applying this test to the present case we find that the substantive conditions for entitlement to subsidy were contained in Clause 2 of the Manual for Central Investment Subsidy Scheme (Annexure B to the petition) which prescribed the eligibility qualifications. The essential conditions for qualifying for grant of subsidy according to the Scheme were that the Unit must be a new industrial unit engaged in manufacturing items specified in the Scheme and must be located in area specified in the Scheme. Existing Units engaged in manufacturing of items specified in the Scheme were also eligible to claim subsidy under the Scheme provided they were located in areas specified in the Scheme if such Units wanted to undertake expansion of their existing Units. Clause 1.3 of the Scheme declared that the Scheme had come into operation with effect from 1-10-1970 in respect of the areas indicated in column 3 of the Part A of Annexure 2. Clause 1.3 of the Scheme declared that the Scheme had come into operation with effect from 1-10-1970 in respect of the areas indicated in column 3 of the Part A of Annexure 2. It was also declared that the Scheme was expected to remain in operation up to the end of 5th Five Year Plan and could be extended further if considered necessary by the Government of India. The Scheme has been amended from time to time but the essential eligibility qualifications remain the same i.e. the area in which the Unit was located and the date of commencement of production of the Unit. The procedure to be followed for grant of subsidy cannot, therefore, be said to be of substance while deciding the eligibility for subsidy of a particular Unit. Thus, when the subsidy was applied for, whether or when it was sanctioned and whether or when it was disbursed will not be relevant for the purpose of deciding eligibility to the grant of subsidy. While deciding eligibility the only consideration will be whether on following the entire procedure for claiming subsidy the Unit would have got subsidy under the Scheme or not. This view is also in consonance with the principles of reasonableness and fairness because if grant of subsidy is made dependent on the date of its sanction by the State Level Committee, Units similarly situated may get different treatment. If the application of a Unit was processed speedily and sanction was granted by the State Level Committee before withdrawal of the Scheme such Unit would receive subsidy and a Unit which has applied earlier but whose application was delayed in process of sanction and, therefore, could not be sanctioned before the date of expiry of the Scheme, such Unit would be made to suffer for no fault on its part. Similarly, if defects not substantial in character are found in an application of the Unit and the sanction of subsidy is delayed because of this, such a Unit though eligible for grant of subsidy would not get it only because its application was defective in form though not in substance. In the case before us the subsidy is being denied only on the ground that before it could be sanctioned by the Suite Level Committee, the Scheme was withdrawn by the Government. In the case before us the subsidy is being denied only on the ground that before it could be sanctioned by the Suite Level Committee, the Scheme was withdrawn by the Government. It is not the case of the Respondents that the Petitioner was not eligible for subsidy because of lack of essential eligibility qualifications prescribed by the Scheme. The only reason for rejection of the claim was that the application was not processed and sanctioned by the State Level Committee before the Scheme expired. For the aforesaid reasons we are of the opinion that the Respondents had to consider the case of the Petitioner on merits and could not have rejected the claim of the short ground that it was not sanctioned before the expiry of the scheme. 17. Finally, award about the decision of the Madras High Court in Javkar Fire Works case (supra), a copy of which has been filed by the Respondents after the hearing was over and the case was closed for orders. The facts are similar to the case in hand. The facts taken by the Madras High Court is that till the subsidy is sanctioned by the State Level Committee there is neither any promise nor is there any eligibility in the Applicant unit to claim subsidy. According to the Madras High Court mere filing of an application does not confer any right on the Applicants for subsidy any right either under the Scheme or on the principles of promissory estoppel. We regret our inability to agree with this view. In our opinion, there is a definite promise held out by the Respondents by declaring the Scheme that the entrepreneurs who fulfil the eligibility qualifications under the Scheme would be given subsidy. The promise does not come into being on sanction of subsidy by the State Level Committee. Sanctions of the subsidy after due processing of the application is procedure and not substantial part of the Scheme. Once the eligibility for grant of subsidy is acquired, the right to sanction also is acquired. If the State level Committee delays or denies sanction, the Applicant has a right to seek judicial review of such a decision on the ground that it is arbitrary or discriminatory. Moreover, the Madras High Court seems to have missed the consequences of the view taken by it. If the State level Committee delays or denies sanction, the Applicant has a right to seek judicial review of such a decision on the ground that it is arbitrary or discriminatory. Moreover, the Madras High Court seems to have missed the consequences of the view taken by it. If the grant of subsidy is made dependent on date of sanction by the State Level Committee absurd results will follow. As already pointed out if two Applicants similarly situated apply on the same day but application of one is processed cast and receives sanction before the expiry of the Scheme but the other application is not processed as fast and before it is sanctioned the Scheme expires, the latter Applicant shall suffer for no fault on his part. We, therefore, find ourselves unable to follow the decision of the Madras High Court. 10. This Court in the aforesaid case has held that an application for grant of incentives under the scheme could not have been rejected on the ground that it was not processed before expiry of the scheme. 11. In the present case the Petitioner as he has established an Industry under the Consortium Bank Credit Scheme is certainly entitled for the subsidy under the scheme which was sanctioned to the tune of Rs. 2.94 lacs and his claim has to be processed by Respondents No. 3 and 4. Petitioner's case could not have been turned down in the manner and method it has been done by the Respondents. This Court has carefully gone through the judgment delivered by the Respondents in the case of Smt. Sadhna Chourasia (supra) and this Court is of the considered opinion that the Respondents can certainly take action against the Respondents under the provisions of Madhya Pradesh Lok Dhan (Shodhya Rashiyon ki Vasuli) Adhiniyam, 1988. However, at the same time action can be initiated only after adjusting the margin money towards subsidy amount as the Petitioner has complied with the provisions of Consortium Bank Credit Scheme and there is no deny to that effect on the part of the Respondents. 12. Resultantly, Writ petition is allowed. However, at the same time action can be initiated only after adjusting the margin money towards subsidy amount as the Petitioner has complied with the provisions of Consortium Bank Credit Scheme and there is no deny to that effect on the part of the Respondents. 12. Resultantly, Writ petition is allowed. The Respondents are directed to process the claim of the Petitioner for grant of subsidy in respect of 30% margin money from 2002 i.e. the date from which the Petitioner became entitled for grant of subsidy and thereafter the Respondents shall adjust the account of the Petitioner and shall also be free to take action in accordance with law. No order as to costs. C.C. as per rules.